Balrampur Chini Q2 Results Review - Cost Woes Hurt; New Season Looks Encouraging: Systematix
Despite some unseasonal rainfall in late Oct, sugarcane crop seems healthy, and management expects yields to improve this year.
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Systematix Research Report
Balrampur Chini Mills Ltd. reported 8% YoY decline in Q2 FY23 revenue at Rs 11.1 billion, broadly in line with our estimate. Sugar revenue fell 8% YoY to Rs 9.4 billion (5% above our estimate) due to a 2% YoY drop in sugar sales volumes, as the company received a lower sugar sale quota on lower sugar production.
The 9% YoY fall in distillery revenue at Rs 2.3 billion was in line with our estimate, caused by an 11% YoY drop in ethanol volumes (also in line) and 1% YoY drop in ethanol realisation.
Balrampur Chini incurred an Ebitda loss at Rs 159 million versus Rs 866 million profit in Q2 FY22, resulting from higher cost of production, lower recovery rates and fixed overheads, driven by revision in wage rates.
Despite some unseasonal rainfall in late October, the sugarcane crop seems healthy, and management expects yields to improve this year.
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